Clinical Lab Billing

Examination of chemical and other types of specimens taken from a human body for assessment, diagnosis, treatment and prevention of a medical condition are the prime services of a clinical lab. These services may be performed by physician office labs, independent labs, hospital labs, or labs located in other institutions. The largest payer of clinical lab services in the US is Medicare. Over 50% of Medicare beneficiaries avail some type of lab service over the course of a year. Labs submit claims which contain information about the lab provider, the lab service, the ordering physician, and the beneficiary for each lab service provided for Medicare beneficiaries.

Clinical Lab Compliance and Billing

It is very important that your billing staff is aware of clinical laboratory compliance and billing issues. While a lot has been done with coding and billing, the laboratory compliance guidance has not been updated since its publication on August 24, 1998. Unfortunately, the most out of date section is the section that lists laboratory billing risks. Non compliance and billing mistakes not only lead to delayed or denied payments, they can also attract legal proceedings against the facility.

The following are the risks faced by clinical labs in their billing and compliance:

Clinical Laboratory Billing Issues

Clinical lab billing issues arise if there are compliance issues and/or billing errors. Some of these compliance issues and billing errors are given below:

  1. Improper Payments: These occur due to billing for medically unnecessary services and/or insufficient documentation.
  2. Medical Necessity: Although a subjective matter in some cases, it is important that there is adequate documentation to support the claim.
  3. Orders and Intent: Bills may be denied or sent back if tests are found to be billed without a specific order for that test in the patient’s charts. Another problem in this area is unsigned requisitions – even though it may be reflected in the physician’s medical record.
  4. Inadequate Documentation: Documentation must be complete and in sufficient detail to allow verification of information.
  5. Related Tests: denial of an inpatient surgical claim for medical necessity could result in a denial of the surgeon’s Part B services. It should also be remembered that services related to non-covered services are not covered under Medicare.

How can MedConverge help?

Medical practice billing and clinical lab billing are two diverse subjects with different requirement of skill sets for each. Clinical lab billing can be afflicted by a host of problems that are not present in medical billing. Issues such as awareness of billing rules and regulations across the country as labs often do business across state lines; handling out of network claims; collecting missing or incorrect information from doctors; knowledge of the  range of options available to manage patient billing, along with the balance billing laws applicable to each state; tracking and differentiating between what is and is not billable; knowing and understanding payers’ complex billing policies and updating to their constantly changing rules; collecting payments from patients who receive checks directly from the payers, amongst others, make clinical lab billing a specialized job.

It is worth remembering that patients are losing patience with confusing bills from their providers and opting to find new providers who offer simple, clear, and consistent bills. According to a study, medical bills from providers confuse 70% of consumers, and the explanation of benefits that health insurers send to members confuse 72% of consumers. What’s more, only 9% of consumers can define such common terms as a premium, deductible, co-insurance, or out-of-pocket maximum.

MedConverge coders and billing specialists are certified, experienced and constantly update themselves to the changing environment of clinical lab billing. We can create a customized billing strategy specific to your organization. For more information on streamlining your clinical lab billing contact us at [email protected]


  1. Burns, J. (2018, June 18). Inconsistent Billing Causes Patients to Find New Providers. Retrieved October 26, 2018, from
  2. Medicare Claims Processing Manual Chapter 16 – Laboratory Services. (2018). Retrieved October 26, 2018, from
  3. Murrin, S. (2014, August). QUESTIONABLE BILLING FOR MEDICARE PART B CLINICAL LABORATORY SERVICES . Retrieved October 26, 2018, from
  4. Richard S. Cooper, E. A. (2018, August 07). Taking Advantage of Payor Contracts: Pitfalls of Hospital Pass-Through Billing Arrangements. Retrieved October 26, 2018, from
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